Plane manufacturer Boeing has asked its largest 737 MAX supplier, Spirit AeroSystems, to resume work on the parts it provides for the beleaguered aircraft model right away. A step indicating that Boeing is getting ready to restart the production of the MAX after a pause since the beginning of the year. However, the intial output will be significantly less than what was envisioned pre-corona-crisis.
Supplier to start work now
While reports surfaced in March that Boeing was intending to restart its MAX assembly line in May, givenfelt far form certain. However, now it seems that things are about to be kicked into gear at its Renton, Washington, factory.
According to Bloomberg, the American Chicago-based manufacturer has asked its largest supplier for the MAX, Spirit AeroSystems, to resume work right away. A critical step if Boeing is to maintain its plan to resume deliveries in the third quarter of 2020.
“They have asked us to start now,” Bloomberg quoted Spirit’s chief executive officer Tom Gentile in an earnings call on Wednesday.
90 fewer frames this year
The two companies agreed earlier this week that Spirit (that’s AeroSystems, not Airlines) would ship 125 MAX frames from its manufacturing facilities to Boeing this year. That is about 90 less than the 216 Boeing had requested before the virus outbreak.
While Spirit may be eager to get back into production, for a company that derives more than half of its revenue from the MAX, this is no small reduction. Although it must have been expected, given the numerous order cancellations and uncertain future for Boeing’s customers. Although, the manufacturer still intends to ramp up production to 31 aircraft per month in 2021.
Spirit AeroSystems credit rating downgrade
Spirit is a manufacturing hub that itself sprang out of Boeing about 15 years ago. Its headquarters are located in Wichita, Kansas, but it has manufacturing facilities in North Carolina, US, France, and Malaysia.
The company has made the Fortune 500 list five years in a row and had 17,000 employees at the beginning of the year. However, since the halting of the MAX production, it has laid off thousands of workers and has had its credit rating downgraded to junk status.
Pivot to recession-proof business
Meanwhile, though, the Kansas-based Spirit has been putting some of its facilities to good use. It is making 22,000 ventilators for the US government stock-pile, and hoping this will allow it to pivot towards less recession-volatile Pentagon contracts in the future.
Boeing halted the manufacturing of its troubled bestseller back in January, then citing the uncertainty of when the plane would gain recertification as reason. While the model’s return to the commercial market has kept getting pushed back, COVID-19 has introduced a whole new set of parameters, and an entirely new meaning of uncertainty, to take into account.
Simple Flying has reached out to Boeing but was yet to receive a reply at the time of publishing. This article may be updated with a comment at a later stage.
Is this the re-ignition the MAX program has been waiting for, or will there be more hiccups and adjustments yet on the way? Let us know your thoughts in the comments.